Wednesday, March 25, 2015

Fighting Symptoms Doesn’t Solve Problems

Pinnacle Construction and Development President William Park

This past Monday night the Montgomery County Board of Supervisors addressed a request by Pinnacle Construction Corp. for a 15 year tax abatement package for their Fieldstone Housing Development totaling more than $700,000. The proposed project is scheduled to be built on Givens Lane in Blacksburg in an effort to alleviate a shortage of affordable housing in Blacksburg. The request comes following a vote by the Blacksburg Town Council to provide almost $800,000 incentive plan. Supervisor Matt Gabriele offered an alternative 10 year abatement package totaling $412,000 which was ultimately approved by a 4-3 vote with Chris Tuck, Todd King, and Gary Creed voting in opposition.

Supporters of the Fieldstone project point to a lack of “affordable” housing in Blacksburg as the reason tax breaks are needed from both the Town of Blacksburg and Montgomery County. While anyone who has been in the market for housing in the area would certainly attest to the fact that the Town of Blacksburg is certainly a more expensive market than other areas in Montgomery County, the $1.2 million in tax incentives granted by Blacksburg and Montgomery County, coupled with over $8 million in federal tax breaks are doing nothing more than alleviating the symptoms of the real issue rather than solving a problem.

A lack of housing does not exist in Blacksburg; it is affordability that is lacking. While there may be other factors involved, the bulk of that issue lies with the Town of Blacksburg. Without a doubt Blacksburg is a beautiful town and a great place to do business and shop, and that reflects a lot of careful planning on the part of the Town Council. The result of that planning and the subsequent regulations on developers and businesses is that the cost of doing business in Blacksburg is often higher than in other areas. The Town’s property tax rate is .22 per hundred, compared to a rate of .13 per hundred in Christiansburg. The logic result is that housing in Blacksburg is more expensive.

The lack of affordable housing exists only within the Town of Blacksburg; Christiansburg and other areas of the county do not share this problem, yet residents of those areas are now being asked to use their tax dollars to alleviate the symptoms of Blacksburg’s problem. While I don’t mean to come across as being callous about the need, it bothers me that Montgomery County has now become an enabler for Blacksburg’s actions, and in the process has started down that same road.

The Blacksburg Town Council answers to the voters in Blacksburg, and if they are satisfied with their taxes and costs associated with living there, I have no issue with it. It does become an issue however, when Montgomery County is dragged into the Town’s problems.

For more than thirty years I worked in industrial maintenance in positions ranging from submarine nuclear power plants to food manufacturing facilities, and I learned early on that unless you address the root cause of a problem you will be forced to repeatedly fight the symptoms. This is exactly what is being done by providing these abatements rather than finding ways to reduce high property taxes and burdensome regulations that drive up the cost of construction. 

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